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Sri Lanka rupee weaker on importer dlr demand

sri_lankaCOLOMBO: Importer dollar demand drove Sri Lanka's rupee down despite a low supply for the local currency caused by an earlier central bank order to commercial banks to unwind some dollar positions.

The rupee closed at 121.50/70 a dollar, down from Thursday's close of 121.10/30.

The rupee has fallen 6 percent since Feb. 9, when the central bank stopped defending it. A Reuters monthly forex poll has forecast the rupee to fall as far as 128.50 by the end of August.

The stock market meanwhile closed flat in thin volume as many investors stayed away on fears of slowing economic growth, rising interest rates and broadly flat December quarter profits.

The main share index fell 0.24 points to hit 5,456.27.

The day's turnover was 381.3 million Sri Lanka rupees ($3.14 million) well below last year's daily average of 2.3 billion. The day's volume was 16.3 million. Last year's daily average was a record 102.7 million.

Foreign investors bought shares worth 50.3 million rupees, extending the offshore net foreign inflow to 2.77 billion rupees so far this year, after a net outflow of 19.1 billion last year.

The Colombo bourse is one of the worst performers this year among Asian markets, with a 10.2 percent loss while the majority have had positive returns.

Copyright Reuters, 2012
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